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Nutrition: food away from home

July 2019

Why take-out food could become a healthy obsession

As our eating habits change companies are developing new ways to produce convenience food that is healthier and better for the environment. That's also good news for investors.

Every convenience brings its own inconvenience. That’s certainly the case with food.
As more of us are dining out or ordering in to make our lives that bit easier, we take risks with our health and damage the environment.

The statistics certainly bear witness to a radical change in our eating habits.

For the first time ever, Americans are spending more on food away from home (FAFH) – whether that’s eating at restaurants, grabbing a snack at a shop or having meals delivered to the front door – than on home-made food. US households spend in excess of USD730 billion a year on eating out. That's the biggest single chunk (43 per cent) of their total food budget (see chart).

fafh: more than just a fad
Total annual food expenditures by category in USD millions; the share of FAFH in household food expenditure
Total annual food expenditures

Source: US Department of Agriculture. Calculated by the Economic Research Service, USDA, from various data sets from the U.S. Census Bureau and the Bureau of Labor Statistics. Total FAFH expenditures include expense account food or meals funded by other sources; household FAFH figures (RHS) do not.

And the phenomenon is not confined to the US. It’s also occurring in other developed countries as well as in emerging markets, which are home to a growing urban population with higher disposable income.

But here’s the inconvenient truth. FAFH is making us unhealthier and adding to pollution.

Outsourced diet: speed over quality

Academic studies have found that FAFH reduces diet quality. It increases the saturated and solid fat content of our total calorie intake as well as the amount of sugar we consume per 1,000 calories in a day – substances known to cause obesity and chronic diseases. For the average adult, one meal eaten away from home once a week increases daily energy intake by about 134 calories, adding two pounds to our weight each year1.

This has an economic cost, too. The treatment of diseases linked to poor diets is estimated to cost USD2 trillion, or 2.8 per cent of global GDP2.

There is also an environmental price to pay. Research shows that FAFH contributes to food waste, an ecological hazard with a carbon footprint bigger than that of India, the world's third biggest emitter of greenhouse gases. 

The cost of outsourcing our diet

Average caloric and nutrient intakes for US individuals 2 years of age and older

Average caloric and nutrient intakes

Source: USDA, Nutritional Quality of Food Prepared at Home and Away From Home, 1977-2008, December 2012

Given changing household structuresand lifestyles, demand for convenience food can only increase further.

Yet as the costs of FAFH’s expansion become clear, the industry will face pressure to deliver healthier meals and to do so in a more sustainable way.

And that, say members of the Pictet-Nutrition Advisory Board (AB), could create a wealth of investment opportunities in the food technology industry. These include companies developing new technologies and processes that increase the micronutrients of convenience food and improve packaging.

A recipe for success

Convenience food tends to be energy-rich and nutrient-poor as it needs go through processing phases to make it less perishable – traditionally done by freezing, drying or adding sugar, salt, starch, saturated fat and other additives.

Recently, however, manufacturers have begun developing a number of new technologies that draw on traditional methods of preserving food – such as using high heat or low temperature – to improve taste and extend shelf life, without the help of unhealthy ingredients.

For example, some firms are deploying ultraviolet light, radio frequencies and electron beams to upgrade a method known as flash pasteurisation, which uses high heat to kill micro-organisms such as mould and bacteria. Others are developing a cold version of heat pasteurisation, known as “cold-pressed” processing, which uses low temperature and high pressure to eradicate micro-organisms. 

In other parts of the food chain, some suppliers are introducing next generation packaging to ensure food safety and maintain freshness and nutritious quality without compromising on convenience. These technologies include advanced sensors, QR codes and smart labelling as well as modified atmosphere  - or 'reduced oxygen' - packaging.

Companies which offer products and services such as refrigerated warehouses or temperature-controlled distribution systems are also essential in beefing up the “cold chain” infrastructure that helps extend the shelf life of fresh food.

All of these services and technologies, whose adoption is accelerating thanks to consumers' growing awareness of their health and well-being, have the potential to make convenience food both faster and healthier. It may be happening already – research from the US Department of Agriculture has found that some of FAFH’s adverse effects on diet quality have fallen over the years, particularly when it comes to the consumption of whole grain, sodium and vegetables4.

Convenience food of the future may become a lot more convenient — healthier, more accessible and affordable.

Chia seeds for everyone?

But making FAFH healthier will also involve solving another problem: food inequality.  

As our AB members point out, the healthy convenience foods currently on offer – think preserved blueberries, quinoa bowls and cold-pressed green juice – tend to alienate lower-income families, who can neither afford such exotic ingredients and nor access full-service grocery stores. These socio-economic groups instead opt for the often heavily processed, calorie-dense and cheap convenience food on sale at local shops.

George Orwell’s observation from 1930s Britain still holds true – the poor spend more on white bread, margarine, corned beef, sugar, tea and potatoes, than on vegetables, milk and fruit. “The less money you have, the less inclined you feel to spend it on wholesome food... White bread-and-marg and sugared tea don’t nourish you to any extent, but they are nicer (at least most people think so) than brown bread-and-dripping and cold water," he wrote5.

Food inequality can be addressed in a number of ways. According to our AB, there are opportunities for specialist food companies to build strong and inclusive global consumer brands that produce healthy and quality food for a mass market. This, alongside community-based programmes offering nutrition education and healthy weight management plans, will go a long way in improving our diets. 

Convenience food of the future could become a lot more convenient – and healthier, more accessible and affordable too.